Thirty passengers of the Dhaka-bound MV Shariatpur-1 swam to shore after the passenger ship was hit by an oil cargo boat, The (Dhaka) Daily Star reported.
The MV Shariatpur-1 sank.
Rescuers said they found the bodies of 26 passengers in the waters near Char Kishori.
Shipping Minister Shahjahan Khan, during a visit to Char Kishori, said compensation would be provided to the victims' families.
A five-member committee will investigate the crash and will submit its report within a week, The Daily Star said.
One survivor, identified as Dewan, told The Daily Star he was able to reach the shore but "eight of my family members are remaining missing."
He said the ship left Naria for Dhaka Monday night with more than 250 passengers on board.
A rescue vessel reached the capsized launch Tuesday morning, the Bangladesh Inland Water Transport Authority said.
Salvage operations are expected to begin once another ship arrives, officials said.